It can mean different things to different people. I will try to explain how I came to understand how etcd could be valuable for me, which may not be indicative of anyone else's use.
We have lots of configuration automation tools: Chef, Puppet, Ansible, SaltStack, etc. These tools make it easier to orchestrate the modification of configuration files on a node. That is well and good.
However, what is my "source of truth" for how things should be configured? Does the fact that node593958.my.co is my primary database server for app foo belong inside Chef, or another tool, or is it more suited for a "directory" of sorts?
No one can answer that but you. But, if you decide that it shouldn't be embedded in your configuration orchestration tool, you may decide to put it in a key value store like etcd. etcd could expose (via REST), something like:
.../apps/foo/primary_db = node593958.my.co
Configuration management could then key off of that source of truth to configure the application appropriately.
etcd exposes an easy to use REST interface to arbitrary storage of hierarchical keys and values.
Nothing is new under the sun. During the first five minutes I was playing around with etcd, I realized I was effectively reinventing LDAP. This is neither wrong nor right, it's simply a different tool for the job. If you like REST and simple interfaces, it's probably a good tool.